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Uber Rejects Proposal That Would Legalize Its Service in Brazil’s Largest City

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Uber Rejects Proposal That Would Legalize Its Service in Brazil’s Largest City

By Dan Horch October 8, 2015 9:18 pmOctober 8, 2015 9:18 pm

SÃO PAULO – Uber rejected a proposal in São Paulo that might have legalized the ride-hailing service there.

On Thursday, Mayor Fernando Haddad of São Paulo said he was signing a bill that imposed fines and vehicle seizures on drivers of unauthorized ride-hailing services, a category that includes Uber. At the same time, the mayor promised to authorize 5,000 drivers in a new category called “black taxis,” offering a way for many of Uber’s drivers to work legally.

Under the “black taxis” definition, the cars must be painted black and be no more than five years old, and they will only be available for hire via app. Drivers will also have to pay a still-to-be-determined licensing fee. “We are going to incorporate innovation without losing control,” the mayor said.

Uber on Thursday rejected the mayor’s proposal, saying in a statement that it “reaffirms that it is not a taxi company and therefore does not belong in any category of this type of service.” The statement called the new law “notoriously unconstitutional” and said the company would continue to operate normally in São Paulo.

The mayor also said Thursday he would form a “study group” to propose regulations for “new transport services,” and Uber said it was now waiting to see these proposals.

In the days leading up to the mayor’s decision, Uber had been urging Mr. Haddad to make the company part of his reform of the city’s transportation network, and it had been marketing itself as a response to Brazil’s surging unemployment.

Uber on Sunday also took out double-page advertisements in two of São Paulo’s leading newspapers in which it promised to create as many jobs in Brazil as five new car factories would.

Uber has been operating in a legal gray area in São Paulo. A court upheld the app’s right to operate in May, but the city transport authority has nonetheless been fining Uber drivers under existing rules banning clandestine transport services.

A court order subsequently forbade Rio from fining an Uber driver, but a spokesman for Rio’s transport authority said that the court order applied only to the particular driver who had won it, and that the authority was still fining unauthorized drivers, including Uber’s.
On Wednesday, Rio’s government fined 12 drivers and seized their vehicles, though the spokesman did not say how many of the drivers worked with Uber.

Uber drivers in São Paulo and Rio said that the company reimbursed them for any such legal expenses, as it has done in other cities.